<PAGE>
 
                    U.S. SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549

                                  FORM 10-QSB

  [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
                      EXCHANGE ACT OF 1934 [FEE REQUIRED]

               For the Quarterly Period Ended December 31, 1996

  [_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
                    EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                       Commissioner file number: 0-19852

                     GREAT AMERICAN HOTELS & RESORTS, INC.
                (Name of small business issuer in its charter)
                                        
                GEORGIA                           58-1956846
    (State or other jurisdiction of   (IRS employer identification number)
    incorporation or organization)

         3300 HOLCOMB BRIDGE ROAD, SUITE 290, NORCROSS, GEORGIA 30092
             (Address of principal executives' offices) (Zip code)

                                (770) 798-8500
                          (Issuer's telephone number)

      Securities registered under Section 12(b) of the Exchange Act: NONE

        Securities registered under Section 12(g) of the Exchange Act:
              Title of Class: CLASS A COMMON STOCK, NO PAR VALUE.

     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to the
filing requirements for the past 90 days.

                             Yes [_]      No [X]

     The registrant had 3,510,571 shares of common stock outstanding as of
February 28, 1998.

                                       1
<PAGE>
 
           GREAT AMERICAN HOTELS AND RESORTS, INC. AND SUBSIDIARIES

                                     INDEX
 
 
Part I.   Financial Information                                         Page No.
                                                                        --------
          Item 1. Condensed Consolidated Financial Statements
 
                  Consolidated Balance Sheets-                                 3
                  December 31, 1996 (unaudited) and June 30, 1996
 
                  Consolidated Statements of Income-                           5
                  Three and Six Months Ended December 31, 1996 (unaudited) 
                  and 1995
 
                  Consolidated Statements of Cash Flow-                        6
                  Three and Six Months Ended December 31, 1996 (unaudited)
                  and 1995
 
                  Notes to Consolidated Financial Statements                   8
 
          Item 2. Management's Discussion and Analysis of Financial           10
                  Condition And Results of Operations   
 
 
Part II.  Other Information
 
          Item 1. Legal Proceedings                                           10
 
          Item 2. Changes in Securities                                       10
 
          Item 3. Defaults Upon Senior Securities                             11
 
          Item 4. Submission of Matters to a Vote of Security Holders         11
 
          Item 5. Other Information                                           11
 
          Item 6. Exhibits and Reports on Form 8-K                            11
 

                  Signatures                                                  12

 

                                       2
<PAGE>
 
                        PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

            GREAT AMERICAN HOTELS & RESORTS, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                December 31, 1996 (unaudited) and June 30, 1996

     (In thousands, except per share data)

 
                                          December 31, 1996   June 30, 1996
                                          -----------------   -------------
ASSETS
Current Assets:
  Cash and cash equivalents                          $  244          $  513
  Restricted cash                                         0              38
  Note receivable                                         0             207
  Stock subscription receivable                         364             229
  Due from shareholder                                   33               0
  Accounts receivable                                    58              44
  Deposits                                              150             237
  Property and equipment held for sale                    0              89
                                                     ------          ------ 
TOTAL CURRENT ASSETS                                    849           1,357
 
Property and Equipment:
  Land                                                1,981             884
  Resort rental units                                 4,554           4,442
  Furniture and equipment                               611             599
  Office building and improvements                      441             441
                                                     ------          ------ 
  Accumulated depreciation                             (573)           (441)
                                                     ------          ------ 
NET PROPERTY AND EQUIPMENT                            7,014           5,925
 
Other assets:
  Deferred acquisition costs                            433             514
  Debt issue costs, net                                 100             139
  Due from affiliate                                    179               0
  Prepayments and deposits                                6               9
                                                     ------          ------  
TOTAL OTHER ASSETS                                      718             662
                                                     ------          ------ 
  TOTAL ASSETS                                       $8,581          $7,944
                                                     ------          ------

                                       3
<PAGE>
 
            GREAT AMERICAN HOTELS & RESORTS, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                December 31, 1996 (unaudited) and June 30, 1996

     (In thousands, except per share data)
 
                                          December 31, 1996  June 30, 1996
                                          -----------------  -------------
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable                                   $  245         $  288
  Accrued expenses                                       90            113
  Common stock to be issued                             548              0
  Current maturities of long term debt                1,299            671
                                                     ------         ------
TOTAL CURRENT LIABILITIES                             2,182          1,072
 
Long term debt less current maturities                5,560          5,356
                                                     ------         ------ 
TOTAL LIABILITIES                                     7,742          6,428
                                                     ------         ------  

MINORITY INTEREST                                       394              0
                                                     ------         ------ 
 
Stockholders' equity:
Preferred stock, no par value,
  16,000,000 shares authorized, none issued              --              --
Series A preferred stock, no par value,                                   
  4,000,000 shares authorized, 81,000 issued                              
  and outstanding, liquidation value of                                   
  $10 per share                                         754             766
Common stock Class A, no par value,                                      
  20,000,000 shares authorized, 2,623,519                                 
  issued, 2,598,515 outstanding                       5,569           5,565
Common stock Class B, no par value,                                       
  10,000,000 shares authorized, none issued              --              --
Common stock Class C, no par value,                                       
  2,000,000 shares authorized, 200,000 issued                             
  and outstanding                                         1               1
Treasury stock, 25,004 shares, at cost                   --              --
Additional paid in capital                              260             211
Accumulated deficit                                  (6,139)         (5,027)
                                                     ------          ------ 
TOTAL STOCKHOLDERS' EQUITY                              445           1,516 
                                                     ------          ------  
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY                                 $8,581          $7,944
                                                     ------          ------ 

                                       4
<PAGE>
 
            GREAT AMERICAN HOTELS & RESORTS, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
   For the Three and Six Months Ended December 31, 1996 (unaudited) and 1995
<TABLE>
<CAPTION>
 
(In thousands, except share data)
                                  Three months ended             Six months ended
                                     December 31,                   December 31,
                                  ------------------           -----------------------
                                  1996          1995           1996               1995
                                  ----          ----           ----               ----
<S>                            <C>           <C>            <C>                <C>
REVENUES
  Rental                        $  142         $  172         $  390             $  404
  Travel Agency                     13              4             41                 10
  Other Income                      23             21             41                 45
                                ------         ------         ------             ------
                                   178            197            472                459
 
OPERATING EXPENSES
  Rental                           242            288            551                517
  Travel agency                     14             15             43                 14
  Salaries & wages                  40             19            102                 56
  General & administrative         127            110            366                436
  Depreciation & amortization       83             45            168                 91
                                ------         ------         ------             ------ 
                                   506            477          1,230              1,114
 
LOSS FROM OPERATIONS              (328)          (280)          (758)              (655)
 
GAIN (LOSS) ON THE
SALE OF PREOPERTY                   11             14            (60)                66
 
OTHER INCOME (EXPENSE)               0            (33)             0                (33)
 
MINORITY INTEREST IN LOSS OF
CONSOLIDATED SUBSIDIARY              0             28              0                 (5)
 
INTEREST EXPENSE                  (138)          (145)          (278)              (298)
                                ------         ------         ------             ------ 

NET INCOME (LOSS)               $ (455)        $ (416)        $(1,096)           $ (925)
                                ------         ------         ------             ------
NET INCOME (LOSS) PER
SHARE OF COMMON STOCK           $(0.17)        $(0.17)        $ (0.42)           $(0.43)

WEIGHTED AVERAGE NUMBER          2,625          2,464           2,655             2,168
OF COMMON SHARES
OUTSTANDING DURING PERIOD

</TABLE> 

                                       5
<PAGE>
 
            GREAT AMERICAN HOTELS & RESORTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASHFLOW
        For the Six Months Ended December 31, 1996 (unaudited) and 1995

     (In thousands, except share data)
<TABLE>
<CAPTION>
 
                                                      Six months ended    Six months ended
                                                     December 31, 1996   December 31, 1995
                                                     -----------------   -----------------
<S>                                                  <C>                 <C>
OPERATING ACTIVITIES:
  Net loss                                                     $(1,096)              $(925)
  Adjustments to reconcile net loss to
  cash used by operating activities:
     Depreciation and amortization                                 168                  91
     Stock issued for services and settlements                      23                  31
     Minority interest in loss of
     consolidated subsidiary                                         0                   5
     Loss on the sale of property held for sale                     60                  --
     Net cash required by discontinued operations                   --                 (55)
  Changes in operating assets and liabilities:
     (Inc) dec in accounts receivable                              160                  (6)
     (Inc) dec in prepaid and other                                  5                  (2)
     (Inc) dec in due from affiliates                             (180)                 --
     (Inc) dec in accounts payable                                 (43)                 16
     (Inc) dec in accrued expenses                                 (25)                (46)
                                                               -------               -----
  NET CASH USED IN
  OPERATING ACTIVITIES                                            (928)               (891)
 
INVESTING ACTIVITIES:
  Purchase and construction of property
     and equipment                                              (1,221)               (269)
  Proceeds from sale of property and
     equipment held for sale                                        45                 151
  Payment of organization costs                                     --                  (1)
  Payment of advances receivable                                    --                (248)
  Proceeds (payments) on deposits                                  167                (121)
                                                               -------               ----- 
  NET CASH USED IN
  INVESTING ACTIVITIES                                          (1,009)               (488)
</TABLE>

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<PAGE>
 
            GREAT AMERICAN HOTELS & RESORTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASHFLOW
        For the Six Months Ended December 31, 1996 (unaudited) and 1995

  (In thousands, except share data)
<TABLE>
<CAPTION>
 
                                                   Six months ended    Six months ended
                                                  December 31, 1996   December 31, 1995
                                                  -----------------   -----------------
<S>                                               <C>                 <C>
FINANCING ACTIVITIES:
  Change in restricted cash                                      38                  (6)
  Proceeds from mortgage notes payable and
     long term debt, net of debt-issue costs                    933                  --
  Principal payments on mortgage notes
     payable and long term debt                                (101)               (296)
  Proceeds from issuance of Series A Preferred
     Stock, net of issue costs                                   --                  42
  Proceeds from issuance of Class A Common
     Stock, net of issue costs                                  529                 396
  Proceeds from issuance of Class A 20%
     Cumulative Preferred Participating
     Stock, net of issue costs                                  381                  --
  Proceeds from subscription receivable                         215                 506
  Increase in subscriptions receivable                         (350)                 --
  Other                                                          24                  45
                                                            -------               ----- 
  NET CASH PROVIDED BY
  FINANCING ACTIVITIES                                        1,669                 687
 
INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                         (268)               (692)
 
CASH AND CASH EQUIVALENTS,
  BEGINNING OF PERIOD                                           513                 605
                                                            -------               -----  
CASH AND CASH EQUIVALENTS,
  END OF PERIOD                                             $   245               $ (87)
                                                            -------               ----- 
</TABLE>

                                       7
<PAGE>
 
            GREAT AMERICAN HOTELS & RESORTS, INC. AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         December 31, 1996 (unaudited)

1.   PRESENTATION OF INTERIM FINANCIAL INFORMATION

     In the opinion of the management of Great American Hotels & Resorts, Inc.
and subsidiaries (the "Company"), the accompanying "unaudited" condensed
consolidated financial statements include all normal adjustments considered
necessary to present fairly the financial position as of December 31, 1996, and
the results of operations for the three months and six months ended December 31,
1996 and 1995, and cash flows for the six months ended December 31, 1996 and
1995.  Interim results are not necessarily indicative of results for a full
year.
 
     The condensed consolidated financial statements and notes are presented as
permitted by Form 10Q, and do not contain certain information included in the
Company's audited consolidated financial statements and notes for the fiscal
year ended June 30, 1996.

2.   ORGANIZATION

     Great American Hotels & Resorts, Inc. ("GAR") was incorporated under the
laws of the State of Georgia on July 29, 1991.  The Company was formed for the
purpose of engaging in the business of purchasing, developing and managing
properties in the overnight resort rental market in areas throughout the world.
 
     The accompanying financial statements include the accounts of Great
American Hotels & Resorts, Inc. and its six subsidiaries: Great American
Honeymoon Resorts, Inc., Great American Travel Network, Inc., Great American
Resorts of Florida, Inc., Great American Casinos, Inc., Great American Resorts
of Biloxi, Inc. and Gold Coast Security Trust Properties, Inc.  All significant
intercompany balances, transactions and stockholdings have been eliminated.

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
     CASH AND CASH EQUIVALENTS - For purposes of the statements, the Company
considers all money market accounts and highly liquid debt instruments purchased
with an original maturity of three months or less to be cash equivalents.
 
     PROPERTY AND EQUIPMENT - Property, improvements and equipment are recorded
at cost.  Expenses for repairs and maintenance are charged to expense as
incurred and additions and improvements that significantly extend the lives of
assets are capitalized.  Upon the sale or other retirement of depreciated
property, the costs and accumulated depreciation are removed from the related
accounts and any gain or loss is reflected in operations.
 
     Depreciation is provided using the straight line and accelerated methods
based upon the useful lives of the depreciable assets ranging from five to
thirty nine years.
 
     DEFERRED ACQUISITION COSTS - Deferred acquisition costs include
professional fees and other direct costs related to the evaluation of
prospective property acquisitions.  If the acquisitions are completed, the costs
are included as property costs.  If a prospective property is not acquired, the
costs are expensed.
 
     DEBT ISSUE COSTS - Debt issue costs represent the direct costs of issuing
debt securities.  These costs are being amortized over the term of the related
debt.
 
     INCOME TAXES - The Company accounts for incomes taxes under Statement of
Financial Accounting Standards No. 109 ("SFAS No. 109").  Temporary differences
are differences between the tax basis of assets and 

                                       8
<PAGE>
 
liabilities and their reported amounts in the financial statements that will
result in taxable or deductible amounts in future years.
 
     NET LOSS PER SHARE OF COMMON STOCK - Net loss per share is computed by
dividing the net loss after deducting preferred stock dividends for the period
by the weighted average number of shares of common stock outstanding during the
period.
 
4.   STOCK SUBSCRIPTION RECEIVABLE
 
     The Company issued 400,000 shares of Class A common stock to Caragh
Holdings during August 1995 as a deposit on the purchase of a parcel of land.
Such purchase was later cancelled by mutual consent of the parties.  Caragh
Holdings may purchase the shares by paying $2.00 per share to the Company until
December 31, 1997, at which time any non-purchased shares will be returned to
the Company.  In related agreements, Caragh Holdings agreed to purchase an
additional 300,000 shares of Class A common stock, 200,000 for $3.20 per share
and 100,000 for $2.00 per share or $840,000.  The Company issued the 300,000
shares of stock to Caragh Holdings in September 1995.  Caragh later agreed to
purchase an additional 350,000 shares for $1.00 per share.  As of December 31,
1996, the Company had received $825,000 from Caragh Holdings towards the
subscription and has a stock subscription receivable of $364,000.

5.   SUBSEQUENT EVENTS
 
     During September 1996, the Company formed a wholly owned subsidiary, Gold
Coast Security Trust Properties, Inc. ("Gold Coast"), a Florida corporation.  In
a private placement, Gold Coast offered to sell 1,000 shares of its Class A 20%
cumulative participating preferred shares for $1,000 per share.  Through
February 28, 1998, Gold Coast had sold 940 shares for gross proceeds of
approximately $939,768.
 
     On May 1, 1997, Gold Coast acquired a 65% interest in the issued and
outstanding stock of Jacjon, Inc. ("Jacjon"), a Florida corporation.  The
remaining 35% interest was acquired by an outside investor.  The purchase price
was $1,261,617 in cash, $3,233,090 in mortgage and notes payable and $396,000 in
acquisition costs.  Jacjon owns the 229 room Days Inn / Super 8 and the attached
restaurant in Vero Beach, Florida.  The acquisition was recorded using the
purchase method of accounting by which the assets are valued at fair market
value at the date of acquisition.  The purchase price allocation is as follows:
 

                         Land                         $  671,347
                         Buildings                     3,790,246
                         Furniture, fixtures, etc.       276,214
                         Other assets                    152,900
                                                      ----------
                                                      $4,890,707
 
     In June 1997, the Company formed a majority owned subsidiary, Orlando
Security Trust, Ltd. ("Orlando").  The Company owns 74.25% of the limited
partner interest and 100% of the general partner interest for a total ownership
percentage of 75.25%.  On June 27, 1997, Orlando purchased 100% of the issued
and outstanding shares of ASIG, Inc. ("ASIG"), a Florida corporation.  ASIG owns
the 56 room Ramada Limited in Orlando, Florida.  The purchase price was $479,388
in cash, $1,979,651 in mortgage and notes payable and $242,789 in acquisition
costs.  The acquisition was recorded using the purchase method of accounting by
which the assets are valued at fair market value at the date of acquisition.
The purchase price allocation is as follows:

 
                         Land                         $  354,263
                         Buildings                     2,025,116
                         Furniture, fixtures, etc.       264,375
                         Other assets                     58,074
                                                      ----------
                                                      $2,701,828
 
 

                                       9
<PAGE>
 
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

     The Company's working capital at December 31, 1996 was a deficit of
($1,333,000) as compared to a surplus of $285,000 for the year ended June 30,
1996. Contributing to the reduction of working capital was the Company's net
loss for the six month period of ($1,096,000) which was only partially offset by
other factors affecting working capital; accounts receivable, accounts payable,
deposits, etc. During September 1996, the Company purchased land in Hawaii,
which required a cash outlay of approximately $160,000 and resulted in an
increase of current debt of $167,000. In addition, during the quarter ended
December 31, 1996, the Company had $543,000 in mortgage notes payable become
current further weakening the Company's working capital position. The Company
anticipates having to raise additional funds through private securities
offerings to finance its operations, meet delinquent obligations (See Part II,
Item 3, Defaults Upon Senior Securities) and carry out its business plan, which
includes future acquisitions.

RESULTS OF OPERATIONS

     For the quarter ended December 31, 1996, the Company incurred losses from
continuing operations of ($466,000) and a gain on the sale of property of
$11,000 for a total net loss of ($455,000).  Rental revenues for the quarter
decreased 17% from the prior year period.  Lost roomnights resulting from the
sale of the Hilton Head Cottages were the major contributor to the reduction in
rental revenues.  The Company continues to recognize operating losses from the
Reno property and is currently making changes to management, marketing
strategies and other areas in an attempt to enhance the performance of the
hotel.  Salaries and wages increased significantly over prior year as the
Company employed two professionals to assist with future acquisitions.
Depreciation expense increased as a result of new depreciation charges on the
completed renovations to the Reno property.


                          PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

     On November 17, 1995, RRR, INC. d/b/a MAXimum Resort Rentals, Inc., filed a
lawsuit in Beauford County, South Carolina against the Company.  The
plaintiff was retained by the Company to manage the Company's cottages (sold
fiscal 1996) located in Hilton Head, South Carolina.  The lawsuit alleges that
the Company breached its agreement with the plaintiff when the Company entered
into agreements to sell the cottages.  The lawsuit seeks actual damages of
$3,000,000 plus unspecified punitive damages.  The Company believes this lawsuit
is without merit and intends to defend it vigorously.  The Company is currently
in the deposition process and expects the matter to go to trial within the next
90 days.  The Company has counterclaimed for $110,000.


ITEM 2 - CHANGES IN SECURITIES

     None.

                                       10
<PAGE>
 
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

     As of February 28, 1998, the Company was delinquent on interest payments
amounting to $155,994, dividend payments on preferred stock of $180,410 and
principal payments on notes to individuals totaling $924,549.

            Due Date      Principal Obligation
            --------      --------------------

            06/30/96                  $ 11,000
            02/06/97                    20,000
            03/17/97                     6,000
            04/04/97                    63,000
            05/31/97                    23,000
            06/30/97                    94,333
            08/30/97                    12,000
            12/01/97                    20,000
            12/31/97                   523,216
            01/31/98                   142,000
            02/16/98                    10,000
                                      --------
            Total                     $924,549
                                      --------

     The Company is in the process of negotiating all past due amounts and
intends to seek a reduction in the interest rate for the notes in the near
future. The Company has successfully negotiated with several of the individual
noteholders to arrange payment plans and/or extend due dates.


ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.


ITEM 5 - OTHER INFORMATION

     None.


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     Exhibits - None.

     The Company did not file any reports on form 8-K during the quarter ended
December 31, 1996.

                                       11
<PAGE>
 
                                  SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused the report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                            GREAT AMERICAN HOTELS AND RESORTS, INC.


Date:                           By:
     -------------------           ---------------------------------
                                   Edward L. Bates, President


Date:                           By:
     -------------------           ---------------------------------
                                   David T. Potts, Chief Operating Officer


Date:                           By:
     -------------------           ---------------------------------
                                   Rob A. Turner, Chief Financial Officer

                                       12